SA's trade minister imposes steel tariffs - CNBC Africa

SA's trade minister imposes steel tariffs

Southern Africa

by Reuters 0

An employee inspects newly-made steel coils at a steel plant in Lianyungang, Jiangsu province October 11, 2014. Photo: REUTERS/China Daily

CAPE TOWN (Reuters) - South Africa will introduce a new 10 percent customs duty on certain steel products, Trade and Industry Minister Rob Davies said on Friday, aimed at protecting the local manufacturing industry from cheaper Chinese steel imports.

Cheap imports from China are hurting steel makers in South Africa, which currently does not have import duties on steel. As many as 200,000 jobs are at risk due to a global supply glut of the commodity, ArcelorMittal South Africa has warned.

Following complaints from ArcelorMittal and SAFAL Steel, Davies imposed a 10 percent customs duty on zinc-coated/galvanised steel, aluminium-zinc coated steel and colour coated steel. Previously there was no duty payable.

However, the tariff increases, one of range of other tariff and anti-dumping measures industry was seeking to protect thousands of jobs, would be subject to several conditions.

Among these were that there are no price increases for the steel products in question as a result of this tariff adjustment, and that pre-existing commitments to reduce prices on some products were honoured.

Davies said that ArcelorMittal SA would need to invest 250 million rand ($19 million) in its colour line and SAFAL an extra 300 million rand in its metal coating line in 2017.

"Both companies commit to no retrenchments in these production lines over the next three years," Davies said in a statement.

The companies were not immediately available to comment.

The World Trade Organisation (WTO) allows countries to raise tariffs by up to 10 percent to protect local industries.

($1 = 13.1950 rand)

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